South Korean Venture Investment Hits Record High in First Half

South Korea's venture investment surged to a record 8.9 trillion won (approximately $6.4 billion) in the first half of 2024, marking a substantial 54.3% increase compared to the same period last year. This figure surpasses the previous record set in the first half of 2022, a period characterized by low interest rates and abundant liquidity.

The Ministry of SMEs and Startups (MSS) reported that new venture funds also grew by 33.0% year-on-year, reaching 8.4 trillion won. This growth was partly attributed to government measures, such as reducing the risk weighting for bank investments in policy-based venture funds from 400% to 100%, which spurred financial and policy-based contributions.

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Policy support and the shift towards AI-centric industries have combined to increase investment in early-stage companies, which is significant.

ICT services attracted the most investment, totaling 1.86 trillion won, a 62.2% increase. Electrical and mechanical equipment followed with 1.54 trillion won (up 90.4%), and bio/medical sectors secured 1.50 trillion won (up 53.6%). Significant investments exceeding 100 billion won were also directed towards artificial intelligence (AI) semiconductors, memory chips, and humanoid robots.

Notably, investment in early-stage startups (those less than three years old) rose by 56.4% to 1.83 trillion won. Experts suggest this trend reflects growing recognition of deep-tech startups' potential and a favorable policy environment. The government aims for this investment boom to translate into tangible job creation, with past data showing over 11% employment growth in venture-backed startups, 60% of which were youth hires.

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Venture investment will be strengthened to lead to youth job creation and regional economic revitalization.